Do you want to start earning an income by selling products online through Amazon FBA? If you do, you are probably wondering what you need to be successful. What ingredients are part of a Michelin star Amazon FBA recipe for success?
Unfortunately, it’s not as easy as creating a grocery list of ingredients. There are simply too many articles and considerations you have to research. Sifting through them to come up with a tangible list of needs seems impossible.
That’s where this article comes in. Today, we want to provide you with a list of must-dos if you want any chance of becoming the next big thing on Amazon FBA. We have broken it down into 6 main “ingredients”:
- A great product
- A selling strategy
- A brand
- Search Engine Optimization and traffic
Now that you know what they are, let’s delve a little deeper into each one of these crucial elements.
A Great Product
Every recipe has a main ingredient. Think turkey at Thanksgiving dinner or apple in apple pie. No matter how good a cook you are and how good your other ingredients are, if you have no base, you aren’t cooking anything anytime soon. You can consider your product the first and most important ingredient.
Many people get bogged down trying to dream up a new product to sell. Truth be told, unless you already have a product of your own ready to go, you are most likely better off finding one that is already out there. Private labeling is one method that has become increasingly popular. Under this practice, you find a manufacturer of a product and sell it for them under your own brand as your product.
So, how do you find good products to sell in the first place? Good question!
One of the simplest and most effective ways is to just head over to the Amazon’s Best Sellers. These are products that are proven to have huge demand and are guaranteed to sell. This takes care of the biggest worry most new sellers face, whether their product will even have willing buyers.
In general, most products that consistently sell will have most (or all) of the following characteristics:
- A price range between $10-$50.
- Are easy to ship, i.e. are not too heavy, oddly shaped or fragile.
- Have a good Best Sellers Rank. We recommend between 1000-10,000. This is the sweet spot between competition and high demand.
Some product categories that we think comply with these characteristics are:
- Jewelry and fashion accessories
- Baby clothes and toys
- Personal electronics and accessories
For more on this topic, read our previous article Best Products To Sell On Amazon.
A Selling Strategy
Unless you find an excellent product and you have already established a source that allows you to sell at a high-profit margin, formulating a strategy and choosing a product should go hand in hand. After all, each unique product will require its own unique strategy. It’s a very bad idea to decide on a product and a strategy separately without weighing them against each other.
Think of this as your cooking method. You wouldn’t boil a roast turkey and you wouldn’t bbq a salad.
We won’t leave you to fend for yourself in the murky waters of coming up with a sales strategy. Although you will need to do the research and number crunching on each consideration by yourself, we will provide you with the most important considerations to get you started.
- Profit margin: This is very important, and obviously a higher profit margin is always more desirable. However, in business, compromise has to be made and it’s always important to view your profit margin in the context of the number of sales. If your product has a high-profit margin but doesn’t generate as many sales then it might be equal to a lower profit margin on an item that sells rapidly.
- Sales and replenishment: This depends heavily on the seasonality of the product. For example, textbooks depend heavily on the advent of the school year. You don’t have to keep full stock the whole year round. You can focus on other products or sales in these low months as long as you replenish in time for the next rush. This is especially important as Amazon charges penalties for items left in storage more than six months. You can also plan sales to garner more customers and get rid of excess stock using this information.
Let’s consider your brand as your presentation of the dish. Today, having a brand that’s recognizable and people identify with is crucial to get ahead of the opposition. Yes, if you just want to make some spare cash on the side, then you probably don’t need a comprehensive branding strategy behind your FBA business.
However, if you want to become one of the select few that completely replace their income through Amazon FBA and now make a living out of it, earning 6 to 7 figures annually, a brand is an effective channel through which to achieve this.
So, how do I start my own brand? What do I need to do? Here are some things you will need to establish yourself:
- A good name
- A corporate identity
- A standalone website that may or may not have its own store (fulfillment can still be handled by Amazon)
- A niche
This will effectively separate you from the hundreds of thousands of other nameless entities selling on the Amazon store. Again, you do not need a product of your own to establish your own brand (although, it could help). Private labeling is one very effective way to start your own business with its own identity without actually manufacturing or making anything yourself.
Search Engine Optimization and Traffic
This ties in nicely with the previous section. Having your own brand and your own site will drive far more potential customers to you and your products. SEO has been around for a while now and everyone from bloggers to businesses has employed it as part of their strategy to grow their business and their presence online.
Summed up, it’s techniques used to boost your ranking with search engines, usually Google as it’s the biggest and most widely used search engine out there, with the aim to get more visitors. No one can buy your products if they don’t know it exists or struggle to find it.
One of the huge benefits of using Amazon is that it’s already ranked very highly. Think about it, have you ever searched for a product on Google or even for reviews on a product and not found at least one Amazon result near the top of the first page? We thought not. Selling through Amazon already boosts your chances dramatically of having customers find your products.
However, you can do even more to help your products rise to the top. A website with a blog or its own online store is a great way to boost awareness or drive customers to buy your items on Amazon.
Here is a great guide on how to take advantage of Amazon’s own A9 search engine algorithm so that your products have a better chance of being viewed.
Dinner is served! Just like you need to get your meal to your dinner guests or diners, your products also need to reach your customers. In the real world, this would mean plating it on the appropriate kitchenware or trays and sending it out via waiters or with a food trolley. Unfortunately, when it comes to online selling, it’s not that easy.
In fact, it’s the main reason why Amazon FBA is so popular in the first place. Taking care of packaging, shipping, return policies, storage, and customer satisfaction on your own can be an impossible task, especially for a burgeoning small business. Amazon FBA takes most of this out of your hands.
Of course, you could still sell through the Amazon marketplace and ship the products yourself but why spend your time on this when it could be spent growing your business or with your family?
If you become a truly reputable, top-performing, and high-earning seller on Amazon, you may qualify for Seller-Fulfilled Prime (SFP). SFP allows you to still ship to Amazon Prime users even though you take care of fulfillment by yourself. As basically half of the Amazon users are Prime members, this opens you up to a whole new customer base that was previously only available to FBA partners.
Prices change over time. It could be because of worldly factors beyond you, like other suppliers, quality control, rising or sinking demand, new versions of products, or just because of your competitor’s pricing decisions.
As you can imagine, if you only have one or two products it doesn’t seem like much of a chore to keep tabs on the going prices and adjust yours accordingly. However, once you start to grow and have multiple products under your belt, it could soon become unmanageable.
Luckily, there are three avenues available to handle repricing:
- Manual: You will have full control over your items change in prices, however, it may not be scalable to handle repricing this way.
- Rule-based: You can establish rules that automatically kick in once certain conditions are met and change the prices accordingly. For example, you could tell it to keep your price within a certain percentage of the highest or lowest prices. However, this solution can quickly become short-sighted.
- Algorithm-based: Algorithm-based repricing is also an automated form of repricing, however, it’s much more extensive and uses many more variables to make its decisions.
Time to dish up with this Amazon FBA recipe for success!
This article is just one of the ways we want to help you on your journey to financial freedom through Amazon FBA. There’s no doubt that if you gather up these ingredients beforehand, you’ll make the whole process that much easier on yourself. We hope you have found this eye-opening and that you can’t wait to try this Amazon FBA recipe for success. Enjoy cooking up your FBA dream into reality. Happy selling!